Contractual passing of property under the Sale of Goods Act delayed title transfer and defeated octroi exemption.

Contractual terms governed when property in goods passed under the Sale of Goods Act, 1930. Because the purchase conditions kept the goods at the supplier's risk until delivery, made delivery complete only after successful testing and issuance of the taking-over certificate, and treated receipt at site as the date of delivery, title was intended to pass only after those events. Section 19 operated according to that contractual intention, and Section 22 did not assist because the contract expressly postponed transfer of property. The certificate and departmental letter asserting Government ownership did not change the legal position, so the goods had not vested in the Government when they entered the municipal limits and octroi exemption was unavailable.

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Issues: Whether the property in the goods had passed to the Government of India before the goods entered the municipal limits so as to claim exemption from octroi.

Analysis: The contract terms governed the point at which property would pass. The purchase conditions provided that the goods would remain at the supplier's risk until delivery was completed, that delivery would be completed only upon successful testing and issuance of the taking over certificate, and that the date of receipt by the consignee at site would be treated as the date of delivery. Under Section 19 of the Sale of Goods Act, 1930, property passes when the parties intend it to pass. On the contractual terms, the intention was that title would pass only after delivery and successful testing. The reference to Section 22 of the Sale of Goods Act, 1930 did not assist the appellant because the contract itself specifically postponed passing of property. The certificate and departmental letter asserting Government ownership did not alter the legal position.

Conclusion: The property in the goods had not passed to the Government of India when the goods entered the municipal limits, and the octroi exemption was not available. The appeal was therefore liable to be dismissed.

Ratio Decidendi: Where a contract expressly postpones passing of property until delivery is completed and a specified acceptance event occurs, title does not pass earlier merely because the goods are destined for the Government.

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